Summary
More Americans cannot pay their car loans, with the rate higher than during the 2008 financial crisis. The serious delinquency rate on subprime auto loans has hit 6.9 percent. Total auto debt now stands at $1.67 trillion.
Key Facts
- The 60-day delinquency rate on subprime auto loans is now 6.9 percent, surpassing the 2008 peak of 5 percent.
- Auto debt in the U.S. has increased by $312 billion over the past five years, reaching a total of $1.67 trillion.
- Subprime financing, which is riskier, accounts for about 14 percent of all auto loans, totaling $234 billion.
- Higher vehicle prices and interest rates are significant factors in the inability to pay auto loans.
- Car prices climbed during the pandemic due to supply chain issues, leading to high levels of debt.
- Experts say that defaults on auto loans are a warning sign for the broader economy and could hint at future economic trouble.
- Rising defaults could mean fewer people are able to get to work, impacting local economies.
